The Theory of Economy

supply-and-demand-01-resized-600This summer I had the mixed pleasure of reading a course in Microeconomics and International trade. In microeconomics the primary focus of the researchers is to establish ‘What is the market really doing and why?’ – and this is attempted to be done utilizing mathematical formulas; primarily utilizing the famous graph where two lines cross each-other, the one line sloping downwards (demand) and the other sloping upwards (supply) – and where they meet each other = that’s apparently the optimal price for the product and the optimal quantity of that product in that given market.

What first struck me as being fascinating about these theories was that they seldom predicted how the market would behave in reality, and neither could they be verified with empirical evidence – and most of the time the authors of the my books where busy trying to find reasons and various viewpoints as to why these theories wasn’t working “as they should” – and how they probably did work but it was just that the inventors missed to take into consideration some important factors and variables.

Though, what was the most fascinating about this entire area of research, was how there was this complete worship to the idea that lower prices = higher consumer satisfaction; and that apparently for a market to be functional, what is required is that we produce as many products as possible, to the lowest prices possible, because then the consumers are able to buy as much as possible, and then we’re apparently okay, happy, and have a fruitful existence here on earth.

Obviously, when I looked at these ideas, I silently chuckled – because the logical flaw of this assumption is glaringly simple = the producers are the consumers! YES – that’s the secret of economy and the reason why we’ve got so many unemployed in this day and age is because we’ve failed to understand that when a product is cheaper, someone at the other end gets less money, which in turns means that a (employee) consumer gets less money, which in turns means that the producer gets less customers = and it all ends up in such a way that most lose but a few that manage to reap the monopoly profits of those very low-priced products – because they’ve priced out everyone else.

It’s clear that we have to develop a new way of looking at economics, and that mathematics and statistics isn’t the way to go – no – we actually require to look at the actuality of what is going on. For example, poverty, what is the actuality of poverty? Why does poverty exist to begin with? It’s not a matter of mathematics, rather it’s a matter of seeing what is behind everything in this world – and that is MONEY – money that in itself is a completely innocent creation meant to be but a way of distributing goods and services to where they are required and wanted the most; but in our current system – money has become a point of control – where those that are already rich and on top of things with all possible means make sure the keep those stricken by poverty in place – else we wouldn’t anymore have a functional slave labor force that can produce all of our various gadgets and other mechanics of entertainment.

Thus, what we must ask ourselves, and economists more importantly, is why have we never used our knowledge to produce a sustainable system where all of us are able to create a life that is dignified, cool and enjoyable? What is required for us to do that? MONEY – and what do we need to bring through such money into this world? Resources – so what is then the solution – the real economic master plan as to how to create a world that would be sustainable and practical for all its inhabitants? To agree that we share the resources – at least the basic and most essential resources – those that we MUST HAVE in order to live.

Thus, I stand behind the Living Income Guaranteed – which is a functional, effective and sustainable way of creating a new world for all people where money will be shared – and for those economists that want to make a difference – I suggest that you investigate this concept and bring your knowledge to the table and help to create something from which we can all benefit!


Where Does Money Come From?

28goodman.xlarge1We tend to take the things most visible and obvious for granted and one of these things that very few people do understand properly yet that they are still in contact with on a daily basis is money. We all need money, we all work for money, and we are all dependent on money for our survival – but what is money? Where does money come from?

Most probably know that the printing rights to money in a country tends to be allocated with a bank that is called a Central bank. This bank has the permission to print money and spread it into the economy of the country. And this is really a fascinating aspect of how money works, it is really just paper that has some numbers printed unto it and there is no actual backing behind the money. There is for example no gold backing up the money – it is just paper with numbers dictating its value. This form of banking system is called a fiat banking system.

Thus these papers we call money do not get their value as a predetermined and absolute value. Instead money gets their value from those who use money in their everyday life in order to buy commodities and services. How we – the users of money – value money will become the value of money. As such the value of money is never stable but goes up and down depending upon how much money as been printed in comparison with the amount of commodities and services in circulation in society as well as the current demand for commodities and services.

This is then the absolutely fascinating aspect of money of which not many are aware. Money is created from NOTHING – literally – and then it is sent out in society and it is given a value – and most often it reaches the population in the form of DEBT. Because here is yet another fascinating aspect of money creation – there is an interest on all money that is printed, which means that there will continuously be less money in circulation than what there is debt that must be settled. This in turn leads to a debt spiral, where more debt must be acquired to be able to pay the old debts.

The conclusion is thus that we are indebting ourselves to receive money to have no intrinsic value in themselves – we are thus indebting ourselves to a life of servitude not realizing that the money printed and spread in the form of debt is not an actual and real measure of value – it is a artificial value that is created through make belief – a make belief that we make a reality because we believe in it and act according to it as if it is a reality.

The question we should ask ourselves is why we should require paying an interest on the money that is in circulation in our countries? Should not money be a property of the people? Should not we all have the possibility to be able to acquire food, education and housing without indebting ourselves?

The answer is obvious, because we all want to live without debt. This is why we require educating ourselves on the process of how money is created and in this understand that we as the people of each and every country are able to nationalize the banks and as such take control over our own money supply.

As I said in the beginning – money is created from nothing. It is merely papers with numbers printed unto it and nothing more. Why is that we then continue to hold unto to the belief that money is a scarce resource and something that cannot be owned in plenty by all?

In nationalizing the process of money creation we will be able to issue money and bring it into circulation and in this support new investments, and we would be able to end the credit crunch currently holding the world in a tight grip, simply because the money issued would not be in the form of credit, but in the form of REAL money with no interest attached to its back.

I thus suggest we nationalize our banks and make the process or printing and issuing money something that benefits the wellbeing of all instead of as it exists today – a seemingly endless debt spiral where more and more people forfeit and have their lives ruined.

Investigate the Living Income Guaranteed – our political proposal involves the nationalization of the banks.

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